Copper falls as stronger dollar outweighs fresh supply woes
XLB•Supply concerns, rates and other metals
It marks a reversal after Monday's gains from a big increase in LME copper warrant cancellations — meaning metal marked for warehouse withdrawal — which "stoked fresh concerns of supply shortages," Daniel Hynes, senior commodity strategist at ANZ, said.
The dollar index =USD was up 0.13%. A stronger dollar makes greenback-denominated commodities more expensive for buyers using other currencies.
Tariff worries and an apparent impasse in talks to end the Middle East war have raised fears about U.S. interest rates remaining higher for longer.
Traders were pricing in a 42% chance of a rate hike at the Federal Reserve's September meeting, from 36% a week earlier, according to the CME's FedWatch tool.
Higher interest rates can weigh on growth-dependent industrial materials such as copper, which is used in power and construction, by dampening economic activity.
The dour conditions also helped aluminium shrug off news that the derailment of a train operated by Russian aluminium producer Rusal in Guinea had suspended exports from a 600,000-ton-per-year alumina refinery there.
The light metal fell 0.54% on the LME CMAL3 and eased 0.13% on the SHFE SAFcv1.
Among other LME metals, zinc CMZN3 ticked 0.05% higher, lead CMPB3 added 0.16%, nickel CMNI3 lost 0.48% and tin CMSN3 dipped 0.08%.
On the SHFE, zinc SZNcv1 added 0.44%, lead SPBcv1 dipped 0.15%, nickel SNIcv1 lost 0.8% and tin SSNcv1 lost 0.4%.
Copper eases on dollar strength and growth worries
Copper slipped on Tuesday, as a firmer dollar and concerns about global economic growth outweighed fresh supply worries triggered by heavy stock withdrawal requests on the London Metal Exchange.
Benchmark three-month copper CMCU3 on the London Metal Exchange was down 0.18% at $14,247.5 a metric ton by 0701 GMT. The most-traded copper contract on the Shanghai Futures Exchange SCFcv1 edged 0.21% higher to 107,980 yuan ($16,060.80) a ton.
